Standard Life profits plunge

STANDARD Life yesterday admitted it has joined the ranks of insurers struggling in the recession, stating its pre-tax profits were down 86 per cent in the first half as consumers cut their pension savings.

The group said markets remained “challenging”, as it unveiled an underlying pre-tax profit drop from £345m in the first half of 2008 to £47m this year, far below average analyst expectations of £122m.

Sir Sandy Crombie, who is stepping down as chairman this year after five years in the role, said: “The recession has had an inevitable impact on our performance in the first half of 2009.”

In the first-half, the firm said sales fell by 17 per cent, reflecting a market-driven decline in the value of new customers’ pension pots.

Standard Life reported profits, under the European Embedded Value method that takes into account future returns on insurance, of £348m, 35 per cent down on a year ago.

But the firm said its capital buffers remain strong, holding £3.1bn as of the end of June, only slightly down on the £3.3bn held at the end of last year.

It said it was paying an interim dividend of 4.15p per share, an increase of two per cent, in line with the average analyst forecast of 4.16p.